DBRS Confirms Ratings of Falcon Trust, Series 2003-SMU

DBRS has today confirmed the following classes of Falcon Trust, Series 2003-SMU:

-- Class X at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AAA (sf)
-- Class D at BBB (sf), Interest in Arrears

In addition, Class D has Interest in Arrears and has been noted as such. The trends on the outstanding classes in the transaction remain Stable.

The fourteen loans remaining in the pool are all scheduled to mature by YE2013. All of the loans in this transaction are cross-collateralized and cross-defaulted and are secured by industrial properties. They benefit from a full-recourse guarantee from the loan sponsor, ING Summit Industrial Fund LP, which was acquired by Niagara Acquisition LP on November 1, 2010.

There are currently no loans on the servicer’s watchlist, nor are there any loans in special servicing. All loans remain current on their payments. As of the November 2011 remittance, the weighted-average (WA) DSCR was 2.07 times (x), and the WA debt yield for all outstanding loans in the pool was 18.4%. DBRS considers loans with debt yields in excess of 11.0% to be good candidates for refinance.

As of the December 2011 remittance, approximately $7,700 in interest shortfall exists for Class D. This shortfall was created upon previous repayment of several of the mortgage loans. The shortfall specifically relates to the requirements under the Interest Act (Canada) as specified in the borrower’s loan agreement for calculation of interest for periods of less than one calendar year.

DBRS continues to monitor this transaction on a monthly basis in the Monthly Global CMBS Surveillance report, which can provide more detailed information on the individual loans in the pool.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodologies are CMBS Rating Methodology and CMBS North American Surveillance, which can be found on our website under Methodologies.